Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

A Member of the Law Professor Blogs Network

Wednesday, July 23, 2014

Long Running Breach of Trust Case Shows No Sign of Stopping

FloridaThe case is Siegel v. JP Morgan Chase Bank, and after passing the 10 year mark, it may be the longest running breach of trust suit Florida has ever seen. The case has seen multiple trials and appeals. Now, after JP Morgan Chase has emerged victorious in the latest trial in probate court, the case is headed to appellate court once again. The case involves the beneficiaries of the affluent art collector Dorothy Rautbord challenging distributions made from the trust by corporate trustee, JP Morgan Chase.

See Jeffrey Skatoff,  Breach of Trust Lawsuit in Florida Still Going Strong, Clark Skatoff, July 25, 2014.

July 23, 2014 in New Cases, Non-Probate Assets, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 15, 2014

Minnesota Addresses Thefts by Court-Appointed Guardians

MinnesotaAfter the discovery of abuse by court-appointed guardians in Minnesota, the state audited 24 random accounts handled by Alternate Decision Makers, Inc. The findings uncovered problems with ten accounts ranging from missing documents to possible indications of theft. Allegations of theft by the guardians include unreasonably high fees accessed, missing property, and personal items sold off after the protected person died. The suspicious accounts discovered by auditors are being sent to judges for review and to be remedied.

See James Eli Shiffer, Conservator’s Thefts Prompted 24 State Audits, Star Tribune, July 14, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

July 15, 2014 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Guardianship, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Sunday, July 6, 2014

Article on Trust and Fiduciary Law

Matthew_Harding

Matthew Harding (University of Melbourne Law School) recently published an article entitled, Trust and Fiduciary Law (June 17, 2014) Oxford Journal of Legal Studies, Vol. 33 No. 1, 2013; U. of Melbourne Legal Studies Research Paper No. 686.  Provided below is the abstract from SSRN:

How can it be that the fiduciary relationship has trust at its core if trust is neither a necessary nor a sufficient condition for the existence of such a relationship? My aim in this article is to make some arguments that I think might assist in solving that puzzle. First, I argue that fiduciary relationships are likely to be characterized by relatively ‘thick’ interpersonal trust. Secondly, I argue that moral duties referring to trust play a role in the justification of fiduciary duties, but that the role of trust in the underlying moral duties is contingent, yielding only a contingent connection between trust and fiduciary duties. Finally, I argue that a goal of fiduciary law should be enabling and supporting trusting relationships, but that this goal should be viewed within a broader liberal outlook according to which fiduciary law also enables and supports relationships on terms of detachment.

July 6, 2014 in Articles, Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Friday, June 27, 2014

Lawyer in Tax Fraud Conspiracy Sentenced 15 Years

Money money money

Paul Daugerdas, a former partner at the defunct law firm Jenkens & Gilchrist, has been sentenced to fifteen years in prison in what prosecutors are calling the largest criminal tax fraud in U.S. history. 

Daugerdas, who once ran the law firm’s Chicago office, was found guilty by a New York federal jury on charges including conspiracy, tax evasion and mail fraud.  It is alleged that Daugerdas obtained $95 million dollars from a scheme which involved fraudulent tax deductions or benefits exceeding $7 billion and $1.63 billion lost in U.S. tax revenue. Prosecutors say Daugerdas devised and supervised the promotion of fraudulent tax shelters over almost two decades.   

U.S. district judge William Pauley ordered Daugerdas to forfeit $164.7 million and pay $371 million in restitution jointly with other co-conspirators.  The judge described him as being at “the apex of tax shelter racketeers.”

See Reuters, Former Law Firm Partner Gets 15 Years Prison for Record US Tax Fraud Scheme, The Guardian, June 25, 2014. 

June 27, 2014 in Income Tax, Malpractice, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Attorney Pleads Guilty to Fraud Scheme

Niew

Jamal and Leda Khoury thought they were investing their life savings wisely when they transferred $2.3 million into their attorney’s escrow account to buy commercial real estate property three years ago.  Yet within hours of the cash transfer, their attorney, Kathleen Niew, was stealing from the supposedly secure account to invest in her own scheme. 

Over the course of several weeks, Niew wired millions of dollars to mining investors in places such as Singapore, expecting to make huge profits for herself.  The mining companies failed miserably and Niew never earned a dime.  By the time the Khoury’s realized something was wrong, their retirement was completely gone. 

On Wednesday the couple watched as Niew pled guilty to ten counts of fraud.  Under federal sentencing guidelines, Niew faces up to eleven years in prison, but the judge is free to sentence her whatever he deems appropriate. 

See Jason Meisner, Former Attorney, Radio Host Pleads Guilty in $2.3 Million Fraud, Chicago Tribune, June 25, 2014. 

June 27, 2014 in Estate Planning - Generally, Malpractice, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Thursday, June 19, 2014

Article on Professionally Drafted Trusts After Larke v. Nugus

TrustSteve Evans (University of Leicester School of Law) recently published an article entitled, Should Professionally Drafted Half-Secret Trusts Be Extinct After Larke v. Nugus? (May 30, 2014) University of Leicester School of Law Research Paper No. 14-17.  Provided below is the abstract from SSRN:

This article looks at the growing trend for disappointed beneficiaries to challenge testator's testamentary provisions, and examines the case of Larke v. Nugus, which confirmed that a solicitor's professional duty is to supply information surrounding the execution of a will to those who might have an interest in attacking it (which trumps the duty of confidentiality). Applying this to the doctrine of half secret trusts, where hidden dispositions are what a testator intends, it questions whether following Larke v. Nugus, such dispositions could ever be successfully hidden, and concludes that in modern legal practice the device of a half secret trust is unlikely to succeed.

June 19, 2014 in Articles, Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 17, 2014

The Trouble With Being Your Own Executor

Anti SymbolCarol Van Patten tried to challenge the accounting done by the trustee of the trust she was the sole beneficiary of. The problem arose becuase Van Patten filed pro se on behalf of the estate. The New York Surrogate’s Court found that this constituted the unauthorized practice of law, because she was not representing herself but rather the estate, and it did not matter whether she was the only beneficiary or not.

See David Kasakove & Heather Rogers, If You Think You Can Represent Yourself as an Executor, Think Again!, Bryan Cave, June 12, 2014.

June 17, 2014 in Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, May 29, 2014

North Carolina May Disagree with South Carolina on LegalZoom

GavelAs I have previously discussed, LegalZoom recently experienced a legal win in South Carolina when the state’s supreme court found that the company was not engaged in the unauthorized practice of law. However, North Carolina may not see it that way.  

In LegalZoom v. North Carolina State Bar, Judge James L. Gale denied LegalZoom’s Motion for Partial Judgment on the Pleadings and dismissed the company's claims against The North Carolina State Bar, including equal protection and commercial disparagement claims. The case will go forward and the judge expressed that he had multiple questions to be answered before the case is decided on the merits.  

See Associate Editor, North Carolina Questions Ethics of LegalZoom, Wealth Strategies Journal, May 28, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

May 29, 2014 in New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, May 5, 2014

Stolen Estate Funds Discovered After Attorney’s Death

TheftA Baltimore attorney, Charles Kountz, is suspected of emptying the estate of one of his client’s father. The missing funds were not discovered until after the attorney died. The Roberts family hired Kountz to handle their father’s estate. After the estate’s debts were paid off, a large amount of the remaining $235,000 was expected to be divided between the four heirs of the estate. The family waited two years for the distribution, and then Kountz died. The family was then informed that there was no money left in the estate. The missing funds seem to have gone to Kountz, who wrote himself checks from the estate, and at least $100,000 went to settle the estate of another client. The family is currently attempting to recover the missing funds through the Maryland Bar Association's Client Protection Fund.

See Barry Simms, Family Loses Loved One; Inheritance Disappears, WBALTV, May 1, 2014

May 5, 2014 in Estate Administration, Malpractice, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Thursday, May 1, 2014

South Carolina Says LegalZoom is Not Practicing Law

GavelThe online legal document site, LegalZoom, recently defended a claim that its business constituted the unauthorized practice of law. LegalZoom reached a settlement agreement, in which they agreed to pay plaintiff’s attorneys $500,000 and asked the court for findings of fact, including that LegalZoom is not practicing law. LegalZoom claimed that it simply provides forms that are available to the public through government agencies, and its software inputs information directly from the client word for word into the form.

In Medlock v. LegalZoom.com, Inc., Special Referee Judge Clifton Newman recommended the settlement and found that LegalZoom’s business model is not the unauthorized practice of law. The South Carolina Supreme Court approved the recommendation. LegalZoom’s business practices have also been challenged in North Carolina.

See Terry Carter, LegalZoom Business Model OK’s by South Carolina Supreme Court, ABA Journal, April 25, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

May 1, 2014 in New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)